Norton to Introduce a Job Creation Bill Targeting the Long-Term Unemployed and Young People Next Week When Congress Reconvenes

Press Release

Congresswoman Eleanor Holmes Norton (D-DC) today announced that she will introduce the Reducing Unemployment and Economic Growth Act next week when Congress reconvenes to boost the economy by targeting the two great tragedies of today's unemployment situation-the long-term unemployed and young people trying to enter the workforce. Norton's bill would give employers a $5,000 tax credit against their payroll tax liability for each new net person hired who has been unemployed for 27 weeks or longer, and would also expand full-time job opportunities for young people by increasing the number of AmeriCorps slots from approximately 78,000 to 500,000.

"The District of Columbia is a microcosm of today's dual tragedies-long-term unemployment, and unemployment among young people ready to enter the workforce," said Norton. "The Reducing Unemployment and Economic Growth Act would lower unemployment by giving employers a significant economic incentive to hire the long-term unemployed, which would keep an increasing number of Americans from losing their job skills and becoming permanently unemployed. Additionally, the bill would expand AmeriCorps for a double economic benefit of employing young people victimized by the lagging economy, while also providing urgently needed services to local governments facing federal, state and local cuts to vital programs. Many of the long-term unemployed and most of the youths cannot get unemployment benefits."

An important benefit of Norton's bill is the increase in demand that would quickly be felt in the economy. Putting long-term unemployed people to work with a $5,000 tax credit against quarterly payroll liability would allow businesses, governments and not-for-profits to claim the credit quickly each quarter when they pay their payroll taxes. Businesses would lower the costs of their products, allowing them to increase sales and hire new workers. The long-term unemployed hired, who have had to defer necessities, would have disposable income to spend on goods and services. Expanding the existing AmeriCorps job program to 500,000 full-time participants would avoid costs of starting a new agency and would allow a large number of young people to quickly become AmeriCorps members. Their non-taxable living allowances (with eligibility for a Pell Grant-equivalent education award) will be quickly sent into the economy.

"The nation must not default on its constant admonition and its promise to a generation of young people that an education was needed for work and success in life," said Norton. "AmeriCorps will provide these young workers with valuable workforce experience and skills while they help cash-strapped states and local governments provide services that face federal, state and local cuts, such as to tutoring and other after-school programs, repairing schools, improving health care, and helping the elderly."

Norton said that some of the most recent approaches to unemployment and economic stimulation, such as providing unemployment insurance and infrastructure spending, remain vital and should be renewed. However, traditional approaches will not reach many in the two hard-hit groups she has targeted.

In July 2011, the U.S. Bureau of Labor Statistics (BLS) reported that the number of long-term unemployed, those jobless for greater than 27 weeks, at 6.2 million, which accounts for 44 percent of the total unemployed population. Last month, BLS also reported that the number of unemployed youth 16 to 24 years old rose by 1.7 million to 18.6 million, the lowest July youth employment rate on record since 1948.

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